Woodside’s top brass to match pay with personal stake

Woodside see profit jump by a quarter

The West Australian

Video14 Feb 2019 - Woodside (ASX:WPL) has recorded a full-year net profit after tax (NPAT) of $1.92 billion, an increase of 28 per cent from the prior corresponding period.

New Woodside Petroleum executives and directors will have to bulk up with millions of dollars in shares as part of a new pay system aimed at keeping them focused on the company’s long-term performance.

The newly-adopted remuneration structure, rolled out last year, includes a minimum shareholding policy that requires Woodside’s top executives after five years with the company to “have acquired and maintained Woodside shares” equal to their annual fixed pay.

The group has also toughened its existing shareholding rules for its non-executive directors, who now have to buy shares to the value of $212,700 — their annual board fee — over the same period.

The limit is higher for the company’s chief executive, who is required to have 200 per cent of their salary in shares.

Woodside said the new shareholding policy for executives, which is similar to that adopted by other major Australian companies, aimed to “reflect the long-term focus of management and further strengthen alignment with shareholders”.

Chief executive Peter Coleman, who earned a fixed salary of $1.96 million in 2018 as part of a reduced remuneration package of $8.8 million, has shares valued at $15.8 million.

The six other executives identified as key management personnel earned between $430,055 and $946,751 in fixed pay but all but one — new chief financial officer Sherry Duhe — have at least $819,000 in shares.

The new remuneration scheme reduces executive cash bonuses in favour of equity which vests over five years, subject to performance.

Mr Coleman told an analysts’ conference today that executives’ short-term cash reward “is now at around 121/2 per cent of the total scheme ... down from 30-40 per cent”.

Woodside’s new chairman, former Wesfarmers boss Richard Goyder, said the new scheme was “tailored to Woodside’s corporate strategy, aligns with shareholder interests and allows Woodside to attract and retain the executive talent required to deliver on Woodside’s growth aspirations”.

Mr Coleman’s total pay fell from $10.27 million in 2017 as his cash bonus was cut from $1.87 million to $612,113.

Woodside’s executive rewards are based on a scorecard which measures profit, oil and gas production, safety and delivery of the company’s business plans.

Mr Goyder said the board exercised its discretion last year to reduce the recommended score for Woodside’s executives because of “first half safety and business priorities that were not achieved”.